Bankruptcy Judge Sends a Message to Bank of America

By

Peg Brickley

Oct 4, 2013 4:09 pm ET

Chris Keane/Reuters

Bank of America Corp. has been ordered to pay $10,000 per month for every month it continues to badger a couple to pay off a loan that was discharged in bankruptcy, in a ruling from a prominent judge who says he means to “send a message.”

“This is not just a stupid mistake. This is a policy,” wrote Judge Robert Drain of the U.S. Bankruptcy Court in New York. “And frankly, $10,000.00 a month plus attorney’s fees may not mean much to Bank of America, but at least it will send a message that other attorneys may pick up on.”

Judge Drain’s decision, memorialized in a written ruling issued Tuesday, documents a barrage of letters and phone calls attempting to collect the debt from Edwin and Michelle Ramos. Chapter 7 bankruptcy relieved them of the obligation to pay off their home loan while preserving the bank’s right to foreclose on its collateral. The calls and letters kept coming to the Ramoses, even after their attorney pointed out that their personal liability had been discharged in bankruptcy. The bank ignored him, he said, and, according to court records, failed to respond to Judge Drain until 10 days after he signed an order imposing sanctions on the lender.